TraPac, a company at the Oakland port that has benefited from incentives given to busineeses at the port. The harbor has been deepened to accomodate bigger, deeper ships. Overview of the port in Oakland, Calif., on Thursday, September 24, 2009.

Photo: Liz Hafalia, The Chronicle

TraPac, a company at the Oakland port that has benefited from...

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The Oakland port will be deepening the harbor to accomodate bigger, deeper ships. Overview of the port in Oakland, Calif., on Thursday, September 24, 2009.

Photo: Liz Hafalia, The Chronicle

The Oakland port will be deepening the harbor to accomodate bigger,...

The recession hammered the Port of Oakland as imports from Asia plummeted and exports slowed, but the recent completion of a $432 million project to deepen Oakland's harbor preps the port to compete with other top trade cities when the economy improves, officials and experts say.

The 12-year project, funded with $188 million from the port and $244 million in federal dollars, excavated most of Oakland's terminals from 42-feet to 50-feet, allowing them to accommodate modern, large cargo ships at lower tides even when the vessels are fully loaded with goods.

Prior to the work, ships might have been forced to unload some cargo at other ports before sailing to Oakland or schedule calls at the port around higher tides, port officials said.

Oakland's West Coast competitors, Los Angeles, Long Beach, Seattle and Tacoma, Wash., all have harbors that are 50 feet or deeper. So far, however, Oakland has been able to keep pace. The port is the fifth busiest in the United States, behind Los Angeles, Long Beach, New York and Savannah, Ga.

"This keeps us in play with the big boys," said Jean Banker, the port's maritime division finance manager. "We will always be a major port because we've got that kind of depth; Oakland will retain global gateway status."

In 2008, Oakland's cargo volume declined by 6.4 percent, and 2009 has been even worse. In the first quarter, the cargo volume was down 16 percent from the same time last year. While that was not good news, it was better than the West Coast average loss of 25 percent.

The port laid off about 100 of its approximately 570 employees in 2008 and 2009 and did not fill about 40 other positions. Those cuts came from both the port's maritime and aviation divisions.

In the spring, Oakland was forced to offer incentives to steamship lines and terminal operators (which load and unload vessels) to lure more cargo shipments after Los Angeles and Long Beach extended similar deals.

So far, Oakland has doled out about $457, 511 in incentives to terminal operators. A second phase of the program won't end until May 2010.

While the shipping business has been bad for much of the past two years, there are signs that things are improving. For instance, the Port of Oakland saw an import decline of 21 percent year over year in June, but that slowed to a decline of 11 percent in August, according to port data.

Exports, which have been more resilient than imports, increased nearly 13 percent in August compared to the same month last year.

Terminal operators at the port say Oakland needed to deepen the harbor to stay competitive when the economy picks up.

"It was huge that the port was able to accomplish" the dredging, said Mike Porte, the general manager at TraPac, a terminal operator. "The ships worldwide are larger and they sit lower in the water; if they hadn't done it, the carriers wouldn't be able to bring ships in and we would have become a backwater port."

Dave Sanford, director of policy and legislation at the American Association of Port Authorities, said that experts in the shipping industry believe that the 50-foot harbors will be necessary to handle the influx of goods from Asia in the coming years.

Before the economic downturn, it was widely believed that imports from China would double by 2020. And in 2004, Southern California's lack of cargo capacity left ships stranded off the coast unable to offload goods.

At the time, Oakland's commerce was weighted toward exports. For several years now, the port has tried to increase its imports and had succeeded when the economy went south.

"The economy is showing signs of rebounding, so we would expect that in a relatively short period of time the economics prior to the downturn will resume and Oakland's decision to deepen its harbor will be viewed as a wise one," Sanford said.